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New round of Texas laws may raise cost of mixed drinks

This year, state lawmakers cut the taxes that businesses pay on mixed drinks but created a new sales tax for those who buy them.

Starting Wednesday, it’s up to each bar and restaurant in Texas to decide how to handle the new “mixed beverage sales tax” — and whether to raise the cost of drinks or absorb it themselves.

“The law gives … a lot of flexibility,” said Richie Jackson, CEO of the Austin-based Texas Restaurant Association. “Not everybody is going to do the same thing.

“They can sell it tax included, lower the drink prices or not do anything and just add the [new tax] on top, which would raise the cost of the drink.”

This is one of nearly 50 new laws touching on issues ranging from concealed handguns to child safety that will take effect when the new year starts Wednesday.

Lawmakers said the goal of House Bill 3572 is to reduce hidden taxes and make the taxes on businesses that sell only beer and wine more equitable with those that sell mixed drinks.

The taxes that businesses pay on liquor will drop from 14 percent to 6.7 percent. At the same time, a new mixed-beverage sales tax of 8.25 percent will take effect for consumers — the same tax they have long paid for beer and wine.

Some Texans are not looking forward to the change.

“It’s ridiculous,” said Michael Klein, president of the Austin-based Texas Bar and Nightclub Alliance. “As terrible as the 14 percent tax was, it was a very easily computed tax … and everybody understood it.

“Now you are going to put people with the best intentions into a position to make mistakes,” he said. “It’s a very complicated deal.”

In fact, some consumers could end up paying more.

If a business adds the new 8.25 percent tax to the remaining 6.7 percent mixed-beverage gross receipts tax, which is built into the cost of drinks, people could pay a 14.95 percent tax on each drink — nearly 1 percentage point higher than they did before.

That’s “clearly a tax increase, at least on the consumer,” according to a review of tax legislation by the Austin-based Seay Law Firm.

But Jackson said many Texans may not feel the change, depending on how bars and restaurants handle the tax. “I suspect for the larger public, this will be a nonevent,” he said.

Klein said he believes that this is just the beginning of hikes.

“What’s going to happen the next time there’s a budget crunch? The only thing that’s OK for the Republican Tea Party caucus to raise taxes on are sin taxes,” Klein said. “We know in the future … they’ll come back and raise the mixed-beverage tax the next time they need money.”

Here’s a look at some of the laws taking effect Wednesday:

Concealed handguns

Texans seeking concealed-handgun permits no longer have to provide their Social Security numbers. HB1349

Another law lays out guidelines to help Texans who have become a ward, someone who is incapacitated and requires a guardian, re-establish their rights to buy a firearm — if a court rules that the person is fine and no longer needs a guardian. HB2407

Service animals

As the number of veterans with disabilities — from post-traumatic stress disorder to seizures — grows, so does the use of trained assistance animals, generally dogs. But some of these animals, which help alert people to an onset of symptoms, don’t have the same rights and access as traditional service animals that help people with visual impairments or mobility problems. This law seeks to remedy that. HB489

Utility disconnections

Texans who rent “all bills paid” apartments will get fair warning before their electricity or gas is disconnected. A new measure requires landlords of nonsubmetered multifamily properties to give written notice to tenants and the city before utilities are disconnected because the landlord has not paid the bill.

“This consumer protection measure empowers tenants by ensuring they have advanced notice if gas or electric service is about to be disconnected through no fault of their own,” said Rep. Chris Turner, D-Grand Prairie, who carried the bill in the House.

“This type of situation has occurred all too often in Arlington and elsewhere: The landlord doesn’t pay the utility bill, tenants are left high and dry, and cities are faced with a potential public health crisis because they have citizens who are displaced or suffering from heat or cold exposure.” HB1772

Renters’ rights

Texas renters will now be better protected after a natural disaster.

Generally, apartment or property management workers move renters to a different unit if theirs is no longer habitable.

After the April 2012 tornado in Lancaster, however, an apartment management company tried to require affected tenants to sign new leases — with longer terms — before they would move them, lawmakers say.

Management companies will now be prevented from doing that. SB1120

Protecting children

Texas parents may now create credit files for their children — and freeze those files to make sure that their young ones aren’t victims of identity theft or credit card abuse.

“A staggering number of Texas children have fallen victim to illegal child identity theft, putting them at risk for credit problems before they ever reach adulthood,” said Sen. Jane Nelson, R-Flower Mound, who carried the bill in the Senate. “By giving parents the ability to freeze their children’s credit, we can protect young Texans from identity theft and teach them about the importance of establishing good credit.” SB60

Protecting victims

Victims of stalking and other domestic crimes can now terminate a rental lease early under certain circumstances.

The measure basically expands the list of people who are eligible for early lease termination to include victims of attempted assault or abuse, victims of indecency with a child and sexual performance with a child, and victims of stalking.

“We have been working over the past several sessions to make it easier for victims to escape from dangerous situations,” said Nelson, who carried the bill in the Senate. “No one should have to choose between their safety and the financial impact of breaking a lease agreement.” SB946

Educating prosecutors

While attorneys in Texas must meet continuing-education requirements, there has been no specific requirement on prosecutorial misconduct.

A new law requires attorneys who prosecute felonies and misdemeanors, other than Class C misdemeanors, to take a one-hour course detailing their duty to “disclose exculpatory and mitigating evidence in a criminal case.” The law says a person who on Jan. 1 is an attorney representing the state must complete the training by Jan. 1, 2015. HB1847

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